Elop believes a Surface Windows Phone from Microsoft would 'stimulate' the ecosystem

Nokia CEO Stephen Elop appeared to welcome the idea of Microsoft creating its own Windows Phone in an investor call today. Elop has previously declined to acknowledge or confirm such a project was underway at Redmond, but we later covered news that Microsoft does indeed have its own Windows Phone in the works.

The response from Elop is directed at questions on whether a potential Surface phone would be viewed as competition and harm the partnership the company has with Microsoft. The CEO went onto say:

"We're encouraging of HTC and Samsung and Microsoft or whomever to have devices in the market and to be making whatever investments that helps spur the ecosystem on."

It's clear that Microsoft is currently undergoing a shift in focus to a device and services company, which is something that has been reiterated with the Surface Windows 8 tablets. Microsoft entering into the hardware side of Windows Phone would put the company in direct competition with Nokia and other OEM partners. What we could see from Microsoft is a unique experience that offers that special spark for fans of the OS.

"We're very proud of the unique differentiation that we are bringing to the Windows Phone platform. It's not something that's easily replicated or reinvented or anything like that."

What Microsoft plans to achieve with such a smartphone is unclear, but with the investment it has made in Nokia, as well as the refreshed relationship with HTC, some would be taken by surprise should the company release Windows Phone 8 hardware of its own. Could we see possible customisation, or would Microsoft produce a 'pure' Windows Phone experience?

Microsoft Isn't the same company it was ten years ago something majorly shifted ever since the release of Windows 7... Just like when the Kenect was born the Xbox turned into a beast rather then a burden. They seem have figured out their weakness in product development and got into core development. I think Apple didn't make a mistake with how they made all their products work together. I think the iPhone5 and sueing Samsung are two mistakes Apple cannot take back!
It doesn't matter what people think over time Microsoft will do a great job with Windows 8, the Surface and with their own version of a Windows 8 phone... People will adapt to it. It does look like a back stab to Nokia as I think it looks like Nokia dove into the Windows platform with everything they have but I do not read a lot and am sure Nokia will survive regardless. I would like to see Nokia be bought by Microsoft as it is a great brand but unfortunely the Nokia name wouldn't be carried over as a Microsoft exclusive brand...

I agree with Elop. This has advantages for Nokia (as well as some disadvantages). Nokia's history pre-Windows Phone was one of being the big (huge) fish in a shrinking pond. Nokia ruled the Symbian ecosystem (after they forked off from UIQ) and they basically were the only fish in that sea that was shrinking. That path didn't work out for them long-term.
Now Nokia is trying to be a big (or at least a medium-sized) fish in an ever-increasing pond. With the Surface Phone and with HTC making a great effort with Windows, Nokia's marketshare of the entire Windows will be smaller than their share of the Symbian marketplace was, but the entire WP market will be a heck of a lot bigger. With a bigger market, more people will consider Windows Phone an alternative to Android or iOS, and some of them will buy Nokia phones. Total phones sold by Nokia will increase, even though the % that Nokia has of the total Windows Phone market will be a lot less than the % that Nokia had of the Symbian market.
Look at Samsung and the Nexus phones. Have people stopped buying Samsung-branded phones because everyone is buying a Nexus phone? Or did the Nexus phone increase the Android ecosystem and people still bought Samsung-branded phones as well? (And yes, I know that Samsung has made the past few Nexus phones, so they're winning either way)
For example, before WP I would always say "I really like Nokia quality, Nokia's cameras, etc etc, but I don't want a Symbian phone", and I'm sure there were many many people who thought the same thing. There's probably a lot of people thinking that right now about Nokia and Windows Phone because they are unsure about it and don't have any friends that have a Windows Phone they can try out. Now with more people buying Windows Phones from numerous manufacturers, buying a WP is no longer a risky proposition. And I'm sure that some of these new clients will go to Nokia because of the extra things that Nokia brings to the table.
Windows Phone is already a "pure" Windows phone experience. The only things that the manufacturers add are a few extra apps (like Nokia) or some hardware features (like Nokia's Pureview or HTC Beats Audio). Nothing is taken away from the "pure" Windows experience, unlike the experience with the various skins that Android manufacturers put on their phones. And whatever MS can add to WP, they will probably add to ALL Windows phones from ALL manufacturers. Sure the Surface phone will be very nice hardware, but I'd much rather get a phone from a manufacturer that has a history of good quality phones (like Nokia) rather than getting a great looking phone.

Contrary to what the above poster believes, the overall sales, make or break, of lumia devices doesn't hinge on the US market. Sure they want to push and make some ground there, but here in Australia, Nokia have also made an exclusivity deal with a local Telco by the name of Telstra. This, in my opinion is a great move, Telstra, for those who don't know, is the premium carrier here in Australia. Unmatched coverage, with unmatched data speeds, although you do pay a price premium. Why wouldn't you want you're new flagship device on the best network around? I don't know what the quality of the telcos are like in the US, but I do know how they are here in Aus. I have a friend here who just purchased an iPhone 5, she's with a Telco called Optus (number two in Aus) and unfortunately for here, where we live, only Telstra provide 4g coverage. So if the number two Telco can't provide 4g in high population centres, why the hell would Nokia want their hero device sold by anyone but Telstra over here?

I like this site, really i visit it at least once a day, but the constant complaints about Nokia choosing one particular Telco for exclusively over another for their hero device is really getting old. Its done, get over it, if you want the device, switch telcos. If not, shut up and stop letting it bother you, im sure its nothing personal.

A surface phone would be no better. It will flat out be compatible and/or available on ATT only while folks on other carriers are left to bitch and moan. Sold off contract would be expensive. WP device competition on ATT would be fierce. 8x and Ativ S would have huge discounts in order to compete. This discount would have to be seen on other carriers as well. They would be pissed and quit making WP. And WP will be left to MS and Nokia carry the weight. And people would not switch carriers for their product. Android and Apple wins overall market share as they are available on all three carriers. its a shitty MS/Nokia business exclusive bulklshit. People start jumping ship. Thus ends WP.

MSFT (and Nokia) should concentrate on their launch events, they do have enough time to think about a Surface phone later on. If they mess up they might not get the full attention from the press, with the Google Nexus event on the same day and the iFruit event some days earlier this might not be desirable.

Elop has to say what he has to say PR wise (considering the corner he's backed himself into - WP only future), but he needs to really think about things.
When has Microsoft, ever not wanted most of a market that it competes in and do whatever it takes to win. That's not a good future to be depending on what will be your direct competitor for the OS for your hardware (that you pay $30-$50 per phone for).
As was pointed out elsewhere, this last quarter Verizon in the U.S. sold far more (like a million more) Android handsets than Nokia sold Lumia handsets to the world. I think WP will probably make it as a 3rd choice, but its not making it fast enough for Nokia to live.

As far as Verizon selling more android handsets than Lumias, the compare doesn't work. How many different OEMs sell android devices? That is like comparing how many cars were sold compared to Toyota Prius sold. Compare Lumia to droid razor or something like that. Its not fair to put one brand against 10 other brands and then trash talk that one brand for not performing well in sells.

It amazes me that armchair financial wizards keep putting all there money on Windows Phone to be the make or brake for Nokia. Nokia is a diverse company with other products and services other than just Windows Phone. If you read their financial report today, you would see that they may be still bleeding some, but it is slowing down. Elop or whomever's plan is working. Restructuring takes time. It doesn't happen over night. With Windows 8 devices coming out soon and everything else that they are doing to improve their over company standing, I think you will see a greatly improved 4th Qtr report...
As far as phone sales go, Windows phone is a rrelativelynew OS. With established players like Google and Apple, it's going to take time to get any sizable market share. Verizon may have sold more total Android phones here in the US, than Nokia did world wide, but are you looking at how many different Android phones are being offered (20) as opposed to Nokia's 3-4. And again, you are looking at a well established OS (Android), that the carriers love to push. They also mentioned in their ffinancialreport, which wasn't mentioned here, that their sales of dumb, feature and Asha handsets was up over last Qtr. Not bad for a "dying " company and OS (and I'm not quoting you, just the sentiment of the nay-sayers)...

Whomever said this is MSFT's backup plan is likely correct. Nokia has been beaten down so much in the US market they may never gain a foothold here. MSFT's brand name on the other-hand is pretty strong. Certainly strong enough they can slap some people around if they come looking for a fight.

I don't expect Nokia to be around much after the Surface Phone is released. The 2 big names left standing after CES Spring 2013 will be the new HTC (not the 8X) and the Surface. The rest will either be out of business or nothing more than flies on the horse’s backside.

WHAT MAY be ironic would be that Nokia COULD end up making the Surface Phones. Microsoft doesn’t seem to have any urgency in preventing them from making bad business decisions (like the exclusive 920 at AT&T). IMO, that’s because Microsoft knows that Nokia is in a self-destruct mode, bleeding money, and fresh meat for acquisition.

I also seriously doubt that Mr. Elop would be warmly welcomed back to Microsoft at that time, either. Ballmer is either never smiling with Elop around, or he is seldom, if ever, making eye contact. Ballmer told the investors that he was 100% committed to supporting new Microsoft Software with homegrown hardware. You either build or buy. Nokia for pennies on the dollar.

Surface phone I see it as the nexus for Google except MS makes solid devices. Excited for it can't wait to see what MS is cooking up. By solid I mean I have dropped my Zune HD over 20 times on tile & I don't have major damage on it just a few scratches on the corner & still works like new had it since it came out.

I completely agree. The Surface phone will definatley boost windows phone sales. Microsoft has lots of connections with carriers and lots of $$. This is me is a very good sign that windows phone will grow significantly in market share. It also gives me a sense of sureness that Microsoft is very serious about windows phones. Now im stuck. I want a Lumia 920 but what if Surface phone is better? Im willing to wait for a bit. But I wouldn't wait till April to buy it. Ill probably just get the Lumia 920

I have to agree with him on this one. Look at the sea of Androids in the stores. Odds are that a clueless shopper will buy one, unless they are blinded by Apple. The more WPs the better the chances of the ecosystem becoming more popular. That is what Nokia needs to be successful. They aren't going to succeed by being 80% of an OS that has 5% market share.

The more options the better, 'one size fits all' close minded mentallity only hurts innovation, Surface phone will make OEMs bring better and better stuff to the table, look at the hundreds of options now from HP, Dell, Lenovo, Asus, etc. that we handn't seen before Surface was announced. That silly 'one model' was hurting capitalism a lot and blinding people.

Yes, I know :)
My point is that they both make premium products. Part of the reason the Surface RT tablets are priced so highly is the build quality and, presumably, what went in to the construction of the material.

To break through the myriad of Android Phones and be seen, more models would be preferrble so on that lvl, a Surface Phone would make sense. Also IF Nokia and HTC fails, there needs to be a backup plan.

Guys - use your mentality - he's asked in an earning call if a surface phone is going to hurt Nokia or not - do you think he's going to say:
a) yes it will
b) break down and sob
c) Spin it to make it appear as if it is an advantage to Nokia

I see your point, but I honestly don't think it will hurt Nokia. Speculation states that a Surface Phone will go the way of the Nexus line (that is full price, without an option to subsidize by signing a contract). That kind of model will only appeal to some.

Microsoft and HTC are calling the 8x - Windows Phone 8X, which is by definition, a signature, thereby a reflection of what a Windows Phone should be. What I was inferring to, was that if the Surface Phone is real and available at or shortly after launch, wouldn't that make the Surface Phone THE true signature Windows Phone?

You are right it is hyperbole. MS has to stoke HTC's ego a bit because all the kids in the yard were making more out of Nokia's relationship to Microsoft than it is. Nokia isn't favored any more than any other OEM. MS sang them a few praises because of the first volley of WP devices, the Lumia was clearly the most exciting, the best crafted. Now HTC has answered with some sweet kit of their own, and MS is spreading the love they originally showed Nokia.

So you reply to the first post without replying to the first poster in order for your "witty" post to be near the top and seen by more people? We got ourselves a hijacker over here...
ODM implies that Nokia would be building AND designing the handset. They might be building, but it's doubtful they'll be designing. In this case, OEM would be more suited as it doesn't imply the design work is done by Nokia, but does indicate that Nokia might be building products distributed under MS's branding.

Seriously,,,,are you like the WPCentral hall monitor or something? Pointing out what others are doing while doing the same thing yourself. And yes I know I just did it myself. and replying to someone elses comment to get it read instead of being 140 places down is something everybody does.

yes I am. Where is your pass??? Please go to the principal's office...
Not everybody does it. he did it , and I've seen you do it, but most people don't do it because it's considered poor etiquette and rude. If you have no issues with his rudely hijacking the first comment then you should have no issues with me so rudely pointing out his poor manners.

I have no issue with it because he made a comment relevant to the article. If he would have made a comment totally off topic or something lame like "nokia ftw" then yes,,,I would have an issue with it. And I don't consider it hijacking,,,this is what keeps these articles going. Not everyone reads every comment they read the 1st dozen or so and comment on the ones they feel they have something to contribute to.

I never said I only read the first few comments,,,actually I usually read all the comments if its an article I'm really interersted in because I like getting all the input from the different posters. Infact were both being rude by hijacking this article,,,,you "hijacked" the "hijacker" and I "rejacked" it. And NO I wouldn't even be commenting on it if you didn't bring it up.